Payrolls increase by nearly 1.8 million, topping expectations despite coronavirus resurgence

Two months of record-setting payroll growth slowed in July but was still better than Wall Street estimates even as a rise in coronavirus cases put a damper on the struggling U.S. economy.

Nonfarm payrolls increased 1.763 million for the month. The unemployment rate fell to 10.2% from its previous 11.1%, also better than the estimates from economists surveyed by Dow Jones. An alternative measure that includes discouraged workers and the undermployed holding parttime jobs for economic reasons fell from 18% to 16.5%.

The consensus was for growth of 1.48 million and an unemployment rate of 10.6%.

However, there were wide variations around the estimates as the pandemic’s resurgence dented plans to get the shuttered U.S. economy back online. Forecasts ranged from a decline of half a million jobs to a rise of 3 million. May and June saw a combined increase of more than 7.5 million, the fastest two-month rise in U.S. history.

The reason for those big gains, though, was the return of displaced workers who were laid off as the nation sought to stave off the Covid-19 spread.

Markets reacted little to the news, with stock market futures pointing to a slightly lower open on Wall Street and government bond yields mostly flat.

Though bars and restaurants have struggled to cope with restrictions brought on by the pandemic, leisure and hospitality led the month with a growth of 592,000 jobs, with 502,000 of those coming in eating and drinking establishments.

Government jobs inrecreased by 301,000 while retail added 258,000. Other gains came from professional and business services (170,000), other services (149,000) and health care (126,000).

Social assistance rose by 66,000, transportation and warehousing was up 38,000 and manufacturing increased by 26,000.

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